When you run a company, you do not run it solely for fun. Obviously fun and happiness should be a part of any company you run. After all, you want to have a good life. However, when stress gets you down you might not have fun anymore. It may become about the money only. The stress may begin to eat away at you and eventually you will begin to suffer. There are solutions out there to make it easier to enjoy your business again.

If you are looking at ways to increase your cash flow consider factoring and discounting. These are two options that can certainly make a difference in your company’s operations.

Factoring is a type of invoice finance where you sell your ledger to a third party. This company will maintain your ledger for you, contact clients, and get your invoices paid. In return for this service they give you the funds you require now. You won’t have to wait for the invoice to be paid anymore and you can go on with paying your expenses or expanding your company. You will only receive a portion of the invoice amount such as 85 per cent. Most companies will not offer more than 85 per cent and some may offer a lower amount.

You want to find the invoice finance company willing to offer the best terms for your situation. With factoring you have a solution called non-recourse. It means even if the client fails to pay you back on time you are not liable for the funds given to you by the factor. In recourse factoring you have a certain period of time to get the funds from the client before you have to take control of the invoice again and pay the money back.

Discounting is a different option to factoring. With discounting you will keep your accounts ledger. The discounting company will pay you a similar amount in cash flow funds, but you are still liable for the money from the outstanding invoices. It is more like a loan in which the invoices are collateral and you have to make timely payments to the discounting company. In some ways it is a better option because your clients’ privacy is retained, but there is no choice in paying the funds back should the client not pay you. In other words, there is no option like non-recourse factoring.